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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Seeker of Truth who wrote (50072)	5/17/2004 12:28:53 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 74559

federalreserve.gov Malcolm, the Feds came through with another example this morning. What is this guy saying? If you have read When Genius Failed, the story about the failure of LTCM, you may conclude that the banks have no idea how to manage this risk. If Ferguson is suggesting that the banks are now using The growing importance of market-based finance has not, however, signaled a decline in the commercial banking industry. U.S. banks, for example, have enjoyed record profits that stem, in part, from their activities in securities markets and in the development of new instruments. Indeed, banks' development of sophisticated risk-management techniques helped to fuel the growth of new financial instruments. I like to know what these sohphisticated techniques are. One of the main reasons why LTCM failed was size (my opinion). They were simply so big that they were the market. If the derivatives market are even bigger now, I seriously doubt that risk this size can be managed. Ramsey